The BSE benchmark Sensex today nosedived by over 165 points to 22,466.19 on consistent profit-booking across counters, with investors turning cautious amid a slew of negative factors.

The sentiment was also influenced by the two-day monetary policy meet of the US Federal Reserve that will start late today and is expected to trim monthly bond purchases by another USD 10 billion.

Profit-booking was seen for the the third successive day. In across-the-board profit taking, 11 out of 12 sectoral indices closed in the red with metal, banking, auto and power segments leading the downfall. Consumer durables index managed to to settle in the green.

The 30-share barometer was in the negative terrain for most of the day before settling at 22,466.19, a fall of 165.42 points or 0.73 per cent.

In straight three sessions, it has plunged by 410.35 points or 1.79 per cent.

The wide-based 50-issue CNX Nifty of the NSE also dipped by 46 points or 0.68 pct to 6,715.25.

Investors worries over developments in Ukraine lingered on as the US has already announced some sanctions and also threatened to impose more economic sanctions on key sectors of Russia's economy.

On the domestic front, slowdown in capital inflows and announcement of below normal monsoon continued to weigh on minds of investors.

Stock brokers said wary investors are now waiting for the outcome of the Lok Sabha elections and they hope a new stable government will take initiatives on reform measures.

Jignesh Chaudhary, Head Of Research, Veracity Broking Services said: "Local equities continued to trade weak.... Yesterday, FIIs were seen selling in the local markets and posted its lowest net buying in the whole month. Also, the DIIs continued to be net sellers in the equity. Till date for this month DIIs have been the net buyers only for 2 days in sixteen working days."

Among BSE sectoral indices, Metal fell by 2.69 per cent, followed by Bankex 1.27 per cent, Auto 1.19 per cent, Power 1.11 per cent and FMCG 0.83 per cent.

The market breadth turned negative as 1,506 stocks ended in the red, 1,281 stocks finished in the green while 123 ruled steady. The total turnover rose to Rs 2,865.42 crs from Rs 2,765.58 crore yesterday.

Asian stocks ended mixed. Key benchmark indices in Taiwan, China, Hong Kong rose by 0.84-1.45 per cent while indices in South Korea and Singapore were down 0.15-0.23 per cent. Japanese markets were closed today for holiday.

European markets were trading higher in their early trade. Key indices in France, Germany and UK moved up by 0.06-0.61 per cent.

Shrikant Chouhan, Head- Technical Research, Kotak Securities: Nifty for today’s session opened on a flat note, but quick acceleration on the down side was seen.PSU banks – Metals were on weak side. Capital goods stocks were trading with exhaustion signs. For the coming session, Benchmark ability to trade above 6770 level will be crucial to watch out for. Inability to trade might bring in initial weakness in the market towards the levels of 6670-6630 levels. Reversal point for the market is placed above 6770 close. Closing above 6770 will indicate fresh strength and momentum. Trading above 6770 can scale the market towards 6880-6950 levels.

Indian shares hit lowest close in 1-1/2 weeks; lenders drag on FII sales

(Reuters) Indian shares fell for a third straight session and closed at their lowest level in 1-1/2 weeks on Tuesday as lenders including HDFC Bank declined on worries over offloading of index futures by foreign investors.

Lenders led declines as they form a major portion of index futures, with HDFC Bank losing 1.3 percent and State Bank of India ending down 1.9 percent.

Foreign institutional investors sold index futures worth 11.70 billion rupees ($193.21 million) over the previous two sessions, turning sellers for the first time since April 16.

Overseas buying in cash shares also slowed to 770 million rupees on Monday from 2.57 billion rupees on Friday.

A record-setting rally, driven by hopes of a revival in domestic economy and that the Bharatiya Janata Party led by Narendra Modi will form the next government, is now chipping off as investors chose to book profit amid the January-March earnings season.

"There is a rotation of money happening in the earning season. Some profit-taking is underway which is not bad. Market is getting ready for the election results," said Deven Choksey, managing director at K R Choksey Securities.

Both the indexes marked their lowest close since April 16. Caution also prevailed ahead of the U.S. Federal Reserve's two-day meet starting Tuesday, coming at a time of continued tensions between Russia and the West over Ukraine.

Bharti Airtel Ltd fell 0.8 percent on caution ahead of its quarterly earnings later in the day.

However, IRB Infrastructure Developers Ltd gained 2.8 percent after the company was selected as the preferred bidder to develop and run a toll road project worth 32 billion rupees ($528.45 million) in the western state of Maharashtra.